FTI Consulting’s third yearly survey assessing investor sentiment in Africa has revealed that, while international business is keen on pursuing opportunities in Africa, perceptions of the risks involved increased 10%.

Just under 60% of the respondents considered business opportunities in Africa as “important but risky”, compared with 49% reported last year, while 82% believed that there was a lot of talk, but little change to improve investment environments in Africa.

The 'Confidence in the Continent' report also showed that respondents’ perception of Africa as a strategic growth destination had also decreased, with only 21% of those surveyed considering the continent essential to strategic growth – down from 33% in 2015.

The top three barriers perceived as holding back the international community from considering Africa as essential to strategic growth included political instability (61%), red tape and bureaucracy (57%), and the risk of breaching bribery and corruption regulations (56%).

“[These barriers] may be directly influenced by regional authorities and national governments’ ability to develop and maintain good governance, with security and terrorist threats ranked closely behind; 51% of respondents rated these as obstacles to developing their footprint in African markets,” the report noted.

However, the results of the survey indicated that trust was emerging within the business community, with two-thirds of respondents identifying African business leaders as the most effective at encouraging the right sort of investments into Africa to boost the economy and benefit society.

According to the report, the top five priority areas for investment included agriculture, renewable energies, energy and utilities in general, banking and finance, and telecommunications.

“While shifts in the global economic climate have certainly impacted on Africa and on investors’ perceptions – and at face value there is greater caution – the respondents to this FTI Consulting survey maintain good levels of interest with an underlying commitment to continue to monitor opportunities, if not to invest.

“However, this is linked to the belief that conditions have to improve and that it is in the power of the government leaders to control and direct many of the variables,” the report commented.

The survey found that 87% of respondents believed that infrastructure improvement to support the economy should be a key focus area for leaders, while 79% believed that clamping down on corruption and improving transparency for their population would be essential for investment; 69% believed increasing employment was also essential for investment.